Part 1 of Levy Consulting Co’s series exploring leadership transitions, succession planning, and the hidden risks that emerge between strategy and execution.
A Historic Shift in Business Ownership
One of the largest leadership transitions in modern business history is quietly underway, and most of the businesses caught in the middle of it are not talking about it nearly enough.
Over the next decade, millions of privately held companies, many built by founders who poured decades of their lives into them, will change hands. Owners will retire. Families will decide whether the next generation steps in or steps aside. New leaders will inherit organizations that have long been guided by one person’s instincts, relationships, institutional memory, and personality.
Economists have begun referring to this moment as The Great Ownership Transfer. According to research from the McKinsey Institute for Economic Mobility, roughly 6 million small and midsize U.S. businesses are expected to transition ownership by 2035, representing up to $5 trillion in enterprise value.
That is not just an interesting statistic. It represents millions of employees, thousands of communities, and an enormous amount of economic stability tied to businesses that were often built from the ground up by a single leader or family.
Despite the scale of what is coming, many conversations about succession still focus on the mechanics of the transaction—valuation, tax planning, financing structures, and legal documentation. Those steps are important and necessary, but they are only one part of the story. Ownership can change with the stroke of a pen. What takes longer is the organization adjusting to that change.
The Moment After the Decision
In our work with founders, boards, and leadership teams, we often see the same pattern emerge during transitions. The decision itself, whether a leadership change, a sale, or a merger, receives significant attention and planning. But once the announcement is made and the transition begins, the organization enters a period where everyone is still adjusting to the new reality.
At Levy Consulting Co., we refer to this period as the Transition Gap.
The Transition Gap is the space between decision and execution, when leadership has moved forward, but the systems, teams, and daily operations of the organization are trying to catch up. Even strong organizations can feel surprisingly fragile during this time because the structures that once seemed obvious suddenly need clarification.
During this period, companies often experience a similar set of challenges:
- Confusion about roles and decision-making authority
- Operational slowdowns as teams hesitate or wait for direction
- Communication breakdowns between leadership and staff
- Loss of institutional knowledge when experienced leaders step away
- Misalignment between the expectations of leadership and the day-to-day reality of teams
None of these issues appear in a transaction document or a succession plan, but they often determine whether a transition preserves the strength of an organization or introduces new challenges that take time to unwind.
When the Real Work Begins
Research on family businesses highlights how difficult leadership transitions can be. Studies show that only about 30 percent of family businesses successfully transition to the second generation, and far fewer make it to the third
Much of this difficulty comes down to what happens after the decision is made.
Leaders often spend months, sometimes years, negotiating a transaction or planning a succession. But once leadership changes or a deal closes, the organization still has to figure out how the new structure actually works.
This is especially true for mergers and acquisitions, where many deals consistently fail to achieve their intended value due to integration challenges.
Two organizations may combine on paper, but inside the business, people are still working through practical realities, reporting lines, decision-making authority, overlapping systems, and how teams with different cultures will operate together.
Stewardship During Transition
The organizations that navigate transitions most successfully tend to approach leadership changes differently. Rather than treating the moment as a transaction, they approach it as a period of stewardship.
Stewardship means recognizing that leadership changes affect people, relationships, and the daily functioning of the business. It requires intentional knowledge transfer, thoughtful preparation of new leaders, and clear communication about how the organization will operate moving forward.
At Levy Consulting Co., this is the work we focus on most: providing steady leadership for complex transitions and helping organizations close the Transition Gap before uncertainty begins to slow the business down.
Looking Ahead
The Great Ownership Transfer is already underway. In the coming articles in this series, we will explore several questions that leaders across industries are beginning to face: why succession planning often fails before leadership transitions even begin, what founders often experience when stepping away from organizations they built, and what the next generation of leaders must do to protect the value they inherit.
Because the question facing many businesses today is not whether leadership will change.
It is whether the organization will be ready when it does.
